When you’re in the construction industry, one of the biggest decisions you need to make is whether to rent or to buy your equipment. There are pros and cons to each approach, and you may also make your choice on a case-by-case basis as you consider each piece of equipment you need.
Making the right choice for your business can save you a good deal of money over time, but careless decision-making can cost you. Here’s what to consider when you’re deciding between renting and buying that next big piece of construction equipment.
When to Buy Your Construction Equipment
Buying heavy equipment and machinery is a big investment, but it can also save you money in the long run. Buying is a good decision when:
- You’ll use the equipment regularly. If you dig several foundations for new homes per month, it probably makes sense to invest in that shiny new power shovel.
- You don’t live near a rental center. If it’s a major hassle to get the equipment you need to get the job done, you’ll lose both money and time going to get machinery.
- You’re looking to expand. If you’re doing well financially and are ready to take your business to the next level, owning your own equipment – with your name and logo on the side – also pays advertising dividends and shows potential clients you’re the real deal.
- You can afford to store and maintain new equipment. If you already have an industrial garage and insurance policy that you can add your new piece of equipment to, buying will be more affordable. Remember to calculate hidden maintenance costs into your decision as well.
When to Rent Your Construction Equipment
Buying isn’t for everyone, and an affordable rental can make sense in certain situations. Renting your construction equipment is smart when:
- You want to give it a test drive. Even if you’re in a good position to buy based on the checklist above, it’s still a great idea to rent to take a new piece of equipment for a spin under real-life work circumstances before making your investment.
- You need an extra boost during the busy season. If you could really use an extra forklift for a few months each spring, but would end up parking it for the rest of the year, temporary rentals make good financial sense. This way you’re not on the hook for the insurance and maintenance year-round.
- You want to keep your upfront costs low. Renting makes it easy to accurately figure the cost of the equipment into your project estimate, so you aren’t left on the hook for unexpected maintenance expenses on your construction equipment.
- You can rent from a trustworthy vendor. Finding a place with knowledgeable staff to help answer all your questions about rental equipment is crucial.
When deciding between renting and buying, it’s often a question of when you want to spend your money: now or later. Buying allows you to invest upfront in a piece of construction equipment that can save you money over the long haul, but renting lets you pay little upfront in exchange for an ongoing expense every time you need to use the equipment. Consider carefully, and you’ll help your construction business grow.